Roche Holding AG’s sales declined in the first quarter, even as revenue from new drugs helped offset a drop in the market for Covid-19 tests.
(Bloomberg) — Roche Holding AG’s sales declined in the first quarter, even as revenue from new drugs helped offset a drop in the market for Covid-19 tests.
Sales fell 6.8% to 15.3 billion Swiss francs ($17.2 billion), the Basel-based company said on Wednesday, a smaller decrease than analysts expected. Shares fell 1.3% at 9:45 a.m. in Zurich.
Covid medicine Ronapreve was among the drugs that exceeded sales expectations, though pharmaceutical unit chief Teresa Graham said the orders came from previously agreed contracts. Roche doesn’t expect additional Ronapreve sales going forward, she said.
Orders for eye drug Vabysmo and prescription flu treatment Xofluza also beat estimates, while cancer drug Tecentriq fell slightly short.
Wednesday’s update is Chief Executive Officer Thomas Schinecker’s first report to investors since he took over from now-Chairman Severin Schwan last month. The new CEO faces pressure for positive results from the company’s pipeline of experimental drugs after failures last year in cancer and Alzheimer’s disease.
“In the last year we did have some setbacks,” Schinecker said on a call with reporters. Still, the company has more than 14 late-stage trials due to deliver results this year and aims to introduce three new medicines, he said. “We don’t have to hide. We really see that we have a strong, productive R&D organization.”
Roche will hew to its existing strategy on acquisitions, looking at “all opportunities that are on the market,” Schinecker said. Deals must make sense from a financial and scientific perspective, he added.
Eye drug Vabysmo will help drive growth in coming years, with “still a lot of runway ahead” for sales, he said in a Bloomberg TV interview.
Roche has underperformed its peers this year, losing 3% prior to Wednesday. A Bloomberg index tracking European pharmaceutical companies gained 11%.
Diagnostics sales were down 28%, reflecting the near-disappearance of the Covid testing market. However, on the pharmaceuticals side, Covid still provided a boost. The Ronapreve orders in Japan drove about two-thirds of the beat in expectations on the pharmaceutical side of the company, wrote Peter Welford, a London-based analyst with Jefferies.
Roche confirmed its forecast that revenue and core earnings per share this year will decline in the low single-digit range, at constant exchange rates.
Swiss rival Novartis AG on Tuesday raised its sales and profit forecasts for the year as medicines for heart disease, cancer and multiple sclerosis buoyed earnings.
–With assistance from Marthe Fourcade, Mark Cudmore and Anna Edwards.
(Updates with pharmaceutical unit chief comments in third paragraph.)
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